REG - London Security PLC - Half-year Report <Origin Href="QuoteRef">LSC.L</Origin>

London SecurityAnnouncement

26/09/2016 13:00

RNS Number : 8355K
London Security PLC
26 September 2016
Chairman's statement
Financial highlights
Revenue
56.3m
2015: 50.2m
Operating profit
9.3m
2015: 7.9m
TRADING
The financial highlights illustrate that the Group's revenue increased by 6.1 million (12.2%) to 56.3 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate which has decreased from 1.36 to 1.28. This movement in exchange rates had a positive effect of 2.5 million on reported turnover. If the 2016 results had been translated at 2015 rates, revenue would have been 53.7 million instead of 56.3 million, an adjusted increase of 7.0%. This revenue increase can be attributed to acquisition activity (1.1 million) and improved organisation of work which results in services being performed earlier in the year.
Operating profit increased by 1.4 million (17.7%) to 9.3 million. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been 8.8 million instead of 9.3 million (an adjusted increase of 11.4%). Operating profit as a percentage of turnover has risen from 15.7% to 16.5% as fixed costs, largely of an administrative nature, have been spread over increased turnover.
ACQUISITIONS
In the six months to the end of June, the Group has acquired a total of seven well established businesses at a cost of 1.7 million (2015: six businesses at a cost of 1.4 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. It remains a principal aim of the Group to grow through acquisition. Acquisitions are being sought throughout Europe and the Group will invest at the upper end of the price spectrum where an adequate return is envisaged by the Board.
PROSPECTS
The fire security market is experiencing increased competition and downward pressure on prices. Our strategy is to continue to concentrate on the highest levels of customer service to mitigate this. The Board is optimistic for further success in 2016.
DIVIDENDS
A final dividend in respect of 2015 of 0.40 per ordinary share was paid to shareholders on 8 July 2016.
J.G. Murray
Chairman
26 September 2016

Consolidated income statement
for the six months ended 30 June 2016
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2016
2015
2015
Note
'000
'000
'000
Revenue
56,295
50,191
101,165
Cost of sales
(12,053)
(10,105)
(20,373)
Gross profit
44,242
40,086
80,792
Distribution costs
(20,765)
(19,297)
(37,304)
Administrative expenses
(14,152)
(12,872)
(25,010)
Operating profit
9,325
7,917
18,478
EBITDA*
11,926
10,341
23,191
Depreciation and amortisation
(2,601)
(2,424)
(4,713)
Operating profit
9,325
7,917
18,478
Finance income
19
84
179
Finance costs
(258)
(208)
(446)
Finance costs - net
(239)
(124)
(267)
Profit before income tax
9,086
7,793
18,211
Income tax expense
(2,999)
(2,561)
(5,942)
Profit for the period attributable to equity shareholders of the Company
6,087
5,232
12,269
Earnings per share
Basic and diluted
3
49.6p
42.7p
100.1p
Dividends
Dividends paid per share
Nil
Nil
68.0p
* Earnings before interest, taxation, depreciation, amortisation and impairment charges.
The above are all as a result of continuing operations.


Consolidated statement of comprehensive income
for the six months ended 30 June 2016
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2016
2015
2015
'000
'000
'000
Profit for the financial period
6,087
5,232
12,269
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss
- currency translation differences on foreign operation consolidation, net of tax
3,503
(2,194)
(1,168)
- actuarial gain recognised in the Nu-Swift pension scheme
-
-
(406)
- movement on deferred tax relating to the Nu-Swift pension scheme
-
-
142
- actuarial loss recognised in the Ansul pension scheme
-
-
163
- movement on deferred tax relating to the Ansul pension scheme
-
-
(56)
Other comprehensive expense for the period, net of tax
3,503
(2,194)
(1,325)
Total comprehensive income for the period
9,590
3,038
10,944


Consolidated statement of changes in equity
for the six months ended 30 June 2016





Profit

Share
Share
Capital
Merger
Other
and loss

capital
premium
redemption
reserve
reserve
account
Total
'000
'000
'000
'000
'000
'000
'000
At 1 January 2015
123
344
1
2,033
3,758
79,157
85,416
Comprehensive income for the period







- profit for the period
-
-
-
-
-
5,232
5,232
- exchange adjustments
-
-
-
-
(2,194)
-
(2,194)
Total comprehensive income for the period
-
-
-
-
(2,194)
5,232
3,038
At 30 June 2015
123
344
1
2,033
1,564
84,389
88,454
Comprehensive income for the period







- profit for the period
-
-
-
-
-
7,037
7,037
- exchange adjustments
-
-
-
-
1,026
-
1,026
- actuarial loss on pension schemes
-
-
-
-
-
(243)
(243)
- movement on deferred tax relating to pension schemes
-
-
-
-
-
86
86
Total comprehensive income for the period
-
-
-
-
1,026
6,880
7,906
Contributions by and distributions to owners of the Company







- dividends
-
-
-
-
-
(8,337)
(8,337)
Total contributions by and distributions to owners of the Company
-
-
-
-
-
(8,337)
(8,337)
At 31 December 2015
123
344
1
2,033
2,590
82,932
88,023
Comprehensive income for the period







- profit for the period
-
-
-
-
6,087
6,087
- exchange adjustments
-
-
-
-
3,503
-
3,503
Total comprehensive income for the period
-
-
-
-
3,503
6,087
9,590
At 30 June 2016
123
344
1
2,033
6,093
89,019
97,613


Consolidated statement of financial position
as at 30 June 2016
Unaudited
Unaudited
Audited
as at
as at
as at
30 June
30 June
31 December
2016
2015
2015
'000
'000
'000
Assets
Non-current assets
Property, plant and equipment
10,596
9,335
9,789
Intangible assets
62,358
60,603
60,594
Deferred tax asset
787
699
690
Retirement benefit surplus
3,196
3,283
3,196
76,937
73,920
74,269
Current assets
Inventories
11,166
8,885
9,689
Trade and other receivables
23,707
19,953
19,901
Cash and cash equivalents
25,997
22,696
19,736
60,870
51,534
49,326
Total assets
137,807
125,454
123,595
Liabilities
Current liabilities
Trade and other payables
(21,168)
(18,279)
(16,666)
Income tax liabilities
(839)
(636)
(1,335)
Borrowings
(1,836)
(1,659)
(1,679)
Provision for liabilities and charges
(35)
-
(35)
(23,878)
(20,574)
(19,715)
Non-current liabilities
Trade and other payables
(803)
(703)
(669)
Borrowings
(11,519)
(11,965)
(11,417)
Derivative financial instruments
(244)
(163)
(190)
Deferred income tax liabilities
(1,649)
(1,667)
(1,696)
Retirement benefit obligations
(1,909)
(1,687)
(1,684)
Provision for liabilities and charges
(192)
(241)
(201)
(16,316)
(16,426)
(15,857)
Total liabilities
(40,194)
(37,000)
(35,572)
Net assets
97,613
88,454
88,023
Shareholders' equity
Ordinary shares
123
123
123
Share premium
344
344
344
Capital redemption reserve
1
1
1
Merger reserve
2,033
2,033
2,033
Other reserves
6,093
1,564
2,590
Retained earnings
89,019
84,389
82,932
Total shareholders' equity
97,613
88,454
88,023


Consolidated statement of cash flow
for the six months ended 30 June 2016
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2016
2015
2015
'000
'000
'000
Cash flows from operating activities



Cash generated from operations
14,436
9,865
20,215
Interest paid
(204)
(208)
(425)
Income tax paid
(4,391)
(3,560)
(5,889)
Net cash generated from operating activities
9,841
6,097
13,901
Cash flows from investing activities



Acquisition of subsidiary undertakings
(1,324)
(902)
(1,301)
Purchases of property, plant and equipment
(1,333)
(1,125)
(2,363)
Proceeds from sale of property, plant and equipment
168
91
236
Purchases of intangible assets
(2,024)
(373)
(974)
Interest received
19
20
27
Net cash used in investing activities
(4,494)
(2,289)
(4,375)
Cash flows from financing activities



Repayments of borrowings
(869)
(844)
(1,663)
Dividends paid to Company's shareholders
-
-
(8,337)
Net cash used in financing activities
(869)
(844)
(10,000)
Effects of exchange rates on cash and cash equivalents
1,783
(1,246)
(768)
Net increase/(decrease) in cash in the period
6,261
1,718
(1,242)
Cash and cash equivalents at the beginning of the period
19,736
20,978
20,978
Cash and cash equivalents at end of the period
25,997
22,696
19,736


Notes to the financial statements
for the six months ended 30 June 2016
1 Nature of information
The financial information contained in this Interim Statement has been neither audited nor reviewed by the auditor and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2016 has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2015. The principal risks and uncertainties as disclosed in the year end accounts are considered to be consistent with those that are still applicable now.
Comparative figures for the year ended 31 December 2015 have been extracted from the statutory accounts for the year ended 31 December 2015, which have been delivered to the Registrar of Companies. The Independent Auditor's Report on those accounts was unqualified and did not contain an emphasis of matter paragraph or any statement under Section 498 of the Companies Act 2006.
2 Basis of preparation
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities andincome and expense. Actual results may differ from these estimates.
3 Earnings per share
The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of 6,087,000 (2015: 5,232,000) and on 12,261,477 (2015: 12,261,477) ordinary shares, being the weighted average number of ordinary shares in issue during the period.
For diluted earnings per ordinary share, the weighted average number of shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. There was no difference in the weighted average number of shares used for the calculation of basic and diluted earnings per share as there are no potentially dilutive shares outstanding.
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2016
2015
2015
'000
'000
'000
Profit on ordinary activities after taxation
6,087
5,232
12,269
Basic earnings per ordinary share
49.6p
42.7p
100.1p
4 Actuarial valuation of the pension scheme
As permitted under IAS 19 the Group has not prepared an actuarial valuation of the pension scheme assets and liabilities for the Interim Statement 2016. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2016.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary  Tel : 01422 372852
WH Ireland Limited
Liam Gribben Tel : 0113 394 6600
 


This information is provided by RNS
The company news service from the London Stock Exchange
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